The book contains fifteen detailed case studies of individual Islamic microfinance institutions, which include examples of successful and unsuccessful clients, and financial data about the performance of the institutions themselves. The case studies include institutions from Yemen, Afghanistan, Pakistan, India and Bangladesh, Indonesia, Sudan, Somalia, Kyrgyzstan, Palestine, and Kosovo.
The case study institutions are between them using a wide range of Shari’ah-compliant financing methods, which include pure interest-free loans, profit-sharing products and a variety of other tools, including micro-savings as well as micro-debt. In the accompanying commentary the editors critically examine the performance of the fifteen institutions and demonstrate how Islamic methods can efficiently satisfy the needs of some types of client but not all. It asks which types of products are affordable and beneficial, for which purposes and for whom.
This book is essential reading by all those interested in microfinance and development in the Muslim world, including researchers and students, ‘practitioners’ of microfinance, NGOs and multi-lateral and bi-lateral development agencies, and staff of development banks.
|Table of Contents||v|
|List of figures, tables, and boxes||vii|
|About the editors||xii|
|1. Islamic financing principles and their application to microfinance||1|
|Part I: Qard hasan: pure Islamic microfinance||15|
|2. Is it possible to provide qard hasan and achieve financial self-sustainability? The experience of Akhuwat in Pakistan||17|
|Part II: The predominance of murabaha||33|
|3. Pioneering Islamic microfinance in Kosovo: the experience of START||35|
|4. The Islami Bank Bangladesh’s Rural Development Scheme: ‘need-based banking rather than greed-based micro-banking’?||47|
|5. Providing an Islamic alternative: the experience of Mutahid in Afghanistan||61|
|6. The murabaha syndrome: Reef and Islamic microfinance in Palestine||71|
|7. The experience of Kaah Islamic Microfinance Services in Somalia||83|
|Part III: Institutions providing a range of Islamic financing arrangements||93|
|8. Al Amal Microfinance Bank in Yemen: financial services in times of war||95|
|9. The experience of Kompanion-Invest in the Kyrgyz Republic||107|
|10. Ebdaa Microfinance Bank: musharaka for small-scale farmers in Sudan||115|
|11. The Port Sudan Association for Small Enterprise Development in Sudan: an NGO ‘project’ and now a profitable business||123|
|Part IV: Institutions that also promote (some) profit and loss sharing||133|
|12. BASIX in Mewat, India: an Islamic experiment by a major Indian microfinance institution||135|
|13. MicroDahab in Somalia: a subsidiary of Africa’s largest remittance company||147|
|14. The Al Khair Co-operative Credit Society: a co-operative Islamic microfinance institution||155|
|15. Profit and loss sharing with smallholder farmers in Indonesia: the experience of PT Vasham Kosa Sejahtera||165|
|16. Co-operative Islamic microfinance: Daarul Qur’an BMT from Jakarta, Indonesia||173|
|17. What do the cases tell us?||185|
|Back Cover||Back Cover|
Malcolm Harper Malcolm Harper taught at Cranfield School of Management until 1995, and since then has worked mainly in India. He has published on enterprise development and microfinance. He was Chairman of Basix Finance from 1996 until 2006, and is Chairman of M-CRIL, the microfinance credit rating agency.
Ajaz Ahmed Khan is Senior Microfinance Adviser with CARE International. He holds a PhD in Development Economics and has extensive experience of working in a diverse range of countries in Latin America, Eastern Europe, Asia and Africa. He has written widely on microfinance, Islamic microfinance in particular, as well as more generally on faith and development.